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Author Topic: Whistleblower says big miner pools verify false transactions. Legit?  (Read 1848 times)
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June 18, 2011, 12:37:17 PM
 #1

A whistleblower reveals a conspiracy plot on reddit, though without any evidence. Opinions?

http://www.reddit.com/r/Bitcoin/i2vhs
"I have it on good authority that btcguild.com is secretly using it's hashing power in alliance with another of the big pools to verify false transactions. This is done with a large amount of machines also operating outside of any pool to cover their tracks (so it would appear that it is impossible from the outside).

I'm blowing the whistle on this one now because they have such a huge grasp on the bitcoin economy and nobody even knows it's going on. I want bitcoin to succeed and this needs to be resolved before that can happen.

Throwaway account for obvious reasons."


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DamienBlack
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June 18, 2011, 12:38:51 PM
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No it isn't legit. People would have noticed. It could be traced in the block explorer. There is no way this has been going on. Someone would come forward who has had a transaction that was verified, become unverified or disappear. This simply isn't happening.

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June 18, 2011, 12:41:04 PM
 #3

Not possible as far as I know. All the other clients are meant to check the transactions are valid and reject the entire block if even a single one isn't. The only thing miners could achieve by trying this is to hurt themselves.

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June 18, 2011, 12:41:55 PM
 #4

A whistleblower reveals a conspiracy plot on reddit, though without any evidence. Opinions?

http://www.reddit.com/r/Bitcoin/i2vhs
"I have it on good authority that btcguild.com is secretly using it's hashing power in alliance with another of the big pools to verify false transactions. This is done with a large amount of machines also operating outside of any pool to cover their tracks (so it would appear that it is impossible from the outside).

I'm blowing the whistle on this one now because they have such a huge grasp on the bitcoin economy and nobody even knows it's going on. I want bitcoin to succeed and this needs to be resolved before that can happen.

Throwaway account for obvious reasons."



Awesome. Does this mean I'm profiting slightly more with the workers I've got in BTC Guild?

Carry on then, mentlegen. Carry on.
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June 18, 2011, 12:42:21 PM
 #5

How could they do false transactions? Even if they completely domintate block generating, it is impossible without breaking ECDSA.

They could use their power to send themselves more mind coins than the 50, but that cannot be hidden.

The only thing they really could do is delete transactions.




This sounds like somebody spreading FUD to me, not because it's impossible, but it's not reasonable.

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June 18, 2011, 12:42:46 PM
 #6

There are lots of bitcoins generated, but unclaimed. Is it possible to transfer those bitcoins unnoticed using the plot described by the whistleblower?
http://forum.bitcoin.org/index.php?topic=11107.0

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June 18, 2011, 12:43:19 PM
 #7

Even if you had 80% of the network, you'd have a hard time making 6 block in a row on demand in order to dupe people. There is no profit in a scheme like this, you would only damage bitcoins name, wrecking your investment.

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June 18, 2011, 12:44:37 PM
 #8

There are lots of bitcoins generated, but unclaimed. Is it possible to transfer those bitcoins unnoticed using the plot described by the whistleblower?
http://forum.bitcoin.org/index.php?topic=11107.0


You cannot transfer them without the private key. The best an attack as described can do is double spend coins they are in control of. Your coins will always be yours (assuming there are many confirmations on them).

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June 18, 2011, 12:51:24 PM
 #9

More information from the whistleblower. He claims it is possible to transfer btc while having unsufficient funds.


"I'm not the most knowledgeable person about it, but the way I understand that it works is that when you send a payment you are sending the solved hash containing the transaction information to other clients, those clients verify that you have the funds available to make the transaction. When there have been enough confirmations the transaction goes live.

btcguild is working with another pool plus the non-pooled machines; they make every single machine confirm every single transaction for the brief window that they send a payment that doesn't really have enough funds. Because they control a majority of the network the payment is seen as valid and sent across, even though the funds to do so didn't really exist.

Again, I haven't worked directly on this so it's likely a bit different than that, but this is my understanding of the matter."

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June 18, 2011, 12:53:14 PM
 #10

More information from the whistleblower. He claims it is possible to transfer btc while having unsufficient funds.


"I'm not the most knowledgeable person about it, but the way I understand that it works is that when you send a payment you are sending the solved hash containing the transaction information to other clients, those clients verify that you have the funds available to make the transaction. When there have been enough confirmations the transaction goes live.

btcguild is working with another pool plus the non-pooled machines; they make every single machine confirm every single transaction for the brief window that they send a payment that doesn't really have enough funds. Because they control a majority of the network the payment is seen as valid and sent across, even though the funds to do so didn't really exist.

Again, I haven't worked directly on this so it's likely a bit different than that, but this is my understanding of the matter."


They could do that, but regular clients would not accept the new block. They control most of block generators, but not most of the clients.

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June 18, 2011, 12:56:26 PM
 #11

More information from the whistleblower. He claims it is possible to transfer btc while having unsufficient funds.


"...but this is my understanding of the matter."


Well there's his problem right there.

Glad we got that cleared up!
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June 18, 2011, 01:03:58 PM
 #12

Once again, what you are describing could not go unnoticed. Sorry, but the troll has failed. Try again some other time.

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June 18, 2011, 01:08:14 PM
 #13

Such Blocks would simply be silently rejected by any other Bitcoin node they are sent to.

If the pools did that, they would just waste their ressources.

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June 18, 2011, 01:10:18 PM
 #14

You could always create the longest blockchain with an old computer by ignoring the difficulty rules. But that does not help you, nobody will accept it.

The rules are not made by the miners. The rules are made by all clients. One rule is that the longest valid blockchain is valid, another is the required difficulty. Anything else would not make sense, because creating an invalid blockchain does not require you to obey difficulty rules.

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June 18, 2011, 01:18:24 PM
 #15

Rules in Bitcoin:

* Difficulty must match the difficulty computed from the previous blocks (if it changes, it has tho match the computed difficulty)
* Generated Bitcoins have to be 50/25/12.5... (depending on block number) max.
* Transactions have to be valid (no negative balances) - this gets verified by having ALL previous blocks available in the client.
* and of course: The hash of the block must be correct, work with the current difficulty etc.

What you describe would not work with Rule 3: Every other client that receives such a block would see that there are invalid transactions and ignore it instead of telling other clients a block was found.

This is most likely just a troll that wants miners to move from big mining pools or to make people afraid of Bitcoin.
Or someone who ordered just a bit too much from Silk Road... Roll Eyes

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June 18, 2011, 01:57:27 PM
 #16

This discussion gets to the heart of why I never understood the evil booga-booga about controlling more than 50% of the hashing power:
- There's nothing magical about 50% which would ensure a series of blocks found in a row when you want to perform your double-spend
- The double-spend would get noticed by all clients who have the full block chain (which right now is all of them)

Am I missing something, or is the "50%" risk overblown?
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June 18, 2011, 02:00:14 PM
 #17

This discussion gets to the heart of why I never understood the evil booga-booga about controlling more than 50% of the hashing power:
- There's nothing magical about 50% which would ensure a series of blocks found in a row when you want to perform your double-spend
- The double-spend would get noticed by all clients who have the full block chain (which right now is all of them)

Am I missing something, or is the "50%" risk overblown?

You can go some blocks backwards an regenerate all of them faster than the rest of the network gets the regular blocks generated. By this, you can revert transactions in the past, and then reuse the coins.

Of course for a practical high success probability you need more than 50 %. But you can say with less than 50 % it is improbable enough to be unattractive.

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June 18, 2011, 02:04:35 PM
 #18

This discussion gets to the heart of why I never understood the evil booga-booga about controlling more than 50% of the hashing power:
- There's nothing magical about 50% which would ensure a series of blocks found in a row when you want to perform your double-spend
- The double-spend would get noticed by all clients who have the full block chain (which right now is all of them)

Am I missing something, or is the "50%" risk overblown?

Yes. In all honesty the 50% stuff is overblown. Especially when you consider that no big mining pool would do anything to damage the value of bitcoins. Any manipulation would be easily viewable, it couldn't go undetected. If an outside group wanted to destroy the system they could muddle the waters and hurt things a lot with > 50%, but there is no real posibilty of "forging" new coins or "stealing" coins you own (at least not the ones with a significant number of confirmations). Even if they only have a few confirmations, they can only be returned to the person who owned them before you, they cannot be sent anywhere. Nothing to help people make a profit (unless they are shorting bitcoins.)

If a large pool started trying to "rebuild" the block chain backward, it would get noticed sooner or later, people would leave the pool, and some things would have to be sorted out. But your coins would be mostly safe. Any coins you received during or slightly before the attack may disappear. The attack could happen almost as easily with 51% as with 49%, it all depends on luck, and for it to really work you would need 60-70%, maybe more.

Worrying about the attack is just for the purist who want to ensure nothing can go wrong, even if minor. Securing our wallets is much more important.

If an outside attacker had more power than the entire network for long enough to rebuild everything, and continued attacking any attempts to reboot, then it could be the end of bitcoin. That is why we reward our miners, they secure our network from such an attack. And it is quite secure right now. It would take a _massive_ effort to overthrow the network. And it gets 30% harder each week.

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June 18, 2011, 02:33:02 PM
 #19

This sounds like a griefer who does not understand how bitcoin works.

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June 18, 2011, 03:06:12 PM
 #20

This sounds like a griefer who does not understand how bitcoin works.

bingo.

Although replace "griefer" with "common redditor attention whore" and you're right on the button.

Seriously, reddit is a fucking cesspool of degenerate internet backwash.

I almost expect "IAMA hacker who wrote the bitcoin trojan. AMA." to pop up any hour now...
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